Okay, so this isn't really about America's Greatest Pastime. I'm referring to the strike on the Syrian airbase from which the heinous sarin gas attack was launched by Syrian President Assad, and the fact that it showed that America once again has ... you know.
The strike was a welcome reversal from President Obama's famed "red line," which Syria wasted little time in crossing. The U.S. response was, by all appearances, to erase the red line. Hopefully, this action marks the end of U.S. fecklessness abroad, and puts despots like Assad on notice that we will not stand idly by while they poison their own citizens.
Most on the right, and many on the left, supported the action. Sure, Tim Kaine denounced it, calling it "unlawful." Chalk it up to sour grapes from a guy whose ticket got Trumped (and it puts the lie to the notion that Kaine is a moderate). Retired GOP Rep. Ron Paul claimed there is "zero chance" that Assad was behind the chemical weapons attack. Let's not forget that Rep. Paul proved himself on more than one occasion to be just a tad too nutty to be taken seriously.
But Chuck Schumer and Nancy Pelosi, both of whom had already begun calling for President Trump's impeachment, endorsed the attack.
Schumer: "Making sure Assad knows that when he commits such despicable atrocities he will pay a price is the right thing to do."
And Pelosi: "Tonight's strike in Syria appears to be a proportional response to the the regime's use of chemical weapons."
Even Hillary Clinton spoke out in support of the attack, claiming that she'd have done the same thing as POTUS. (If you believe that, I've got some beachfront property in my Kansas back yard to sell you.)
Did the strike go far enough to dissuade Assad from further atrocities? No, but it's a start, and it's definitely more decisive than mere rhetoric.
The strike was a good move for several reasons. First, as noted above, it represents a reversal of American fecklessness on the world stage, and serves as a warning to those abroad who had come to take U.S. resolve less than seriously.
Second, it should put to rest the notion that Trump is in Vladimir Putin's hip pocket. Here's the response from the Russian deputy U.N. envoy: "We strongly condemn the illegitimate actions by the U.S.” And Russia's prime minister charged that the strike put the U.S. "one step away from clashing with Russia's military," according to Reuters. (This, in spite of the fact that the U.S. reportedly informed Russian forces in advance of the attack.)
Note that this is the same Russian military that had become accustomed to buzzing our fighters in the region, again with no response from the formerly meek U.S. Those actions should have put Russia one step closer to clashing with the U.S. military. But it didn't, under the previous administration, and Russia knew that. So I have no problem with adding Putin to the list of despots put on notice. Maybe he'll think twice about further forays into Ukraine, now that he knows the U.S. response won't be to tell him to "cut it out."
Of course, there are those conspiracy theorists who suggest that this is all part of some grand scheme hatched by Putin and "his new pal in the White House." MSNBC talking head Lawrence O'Donnell postulated that Putin planned the attack so that Trump could garner some positive press.
But when he floated that notion to fellow MSNBCer Rachel Maddow - who had previously never met a right-wing conspiracy theory she couldn't embrace - Ms. Maddow had a "you're crazy" look of disbelief on her face. Apparently her colleague's liberal fantasy is something that even she can't buy into.
A third and related outcome to the attack is that this should once and for all put an end to the tireless speculation that Russia hacked the DNC's servers in order to get Trump elected. It should prove what I've said all along: Vladimir Putin would much rather have had Hillary Clinton bring a third Obama term of feckless foreign policy to the White House, than face a U.S. President who has no problem backing tough talk with corresponding action.
Despite any positive statements Trump may have made about improving relations with Russia, it's always been clear that Trump would seek those improved relations on America's terms. Hillary was a devil Putin knew, and you know what they say about the devil you know vs. the one you don't.
So again, this should put the Russiagate garbage to rest. But it won't, because there are still tantrums to be thrown.
A fourth outcome, and one that few are talking about, is that this may justify our actions against Iraq under Bush II. Our intel at the time was clear: Hussein had WMDs. But when we got there, we couldn't find them, so the left claimed Bush was lying about the intel, or had it fabricated to justify his ends.
Back then, there was considerable speculation that Hussein had spirited them off to Syria, where his buddy Assad stockpiled them. Assad's use of chlorine bombs and sarin gas suggests that just may be the case.
A final positive outcome is that this action, once and for all, should provide hope to the people of Syria. I've been saying for more than a year that the best way to resolve the refugee crisis there is to help the Syrian people secure their homeland from the dual threat of Assad and ISIS. The logic behind this assertion is that the Syrian people don't want to be refugees. They want to remain in their homeland, safe and secure from tyranny and terror, not be uprooted and re-settled in Western countries where they would have to assimilate into cultures far different from their own.
My bandwagon is becoming more crowded. Recent interviews with Syrian refugees in the U.S. have revealed that they want to go home, but they can't until Assad is no longer in power and ISIS is no longer in existence. Saudi Arabia's Deputy Prince bin Salman, speaking during his joint press conference with President Trump, also stated that the Syrians want to remain in Syria. Even as long as a year ago, interviews with Syrian refugees revealed their pain and anguish over leaving their homes behind.
Don't get me wrong, I'm not for hegemony. And our past attempts at orchestrated regime change have not always turned out well, for example when we put the Shah into power in Iran. The Shah's brutal regime led to the ayatollahs taking over that nation, and look where that's got us. But this is how the U.S. has helped to resolve such crises throughout history, from Hitler to the end of the Cold War to the deposition of Saddam Hussein (which Bush I screwed up by not continuing the march on Baghdad after we'd eliminated the threat to Kuwait). Even Bill Clinton used military intervention to help end the Bosnian genocide.
Too often we've tragically stayed on the sidelines, especially when there were no oil interests at play. Think Rwanda and Darfur. Our track record has been far from perfect when it comes to addressing genocide.
So I'm not in favor of us hand-picking a successor to Assad who may in turn wind up being an even worse despot. But neither do I believe we can stand idly by while he gasses his people, and lets ISIS run rampant.
After all, even rocker Tom Petty understands that you don't have to live like a refugee.
Monday, April 10, 2017
Saturday, April 8, 2017
In Like a Lion, Out Like a Lamb
We're talking jobs, of course. At the beginning of March, we learned that non-farm payrolls grew by a robust 235k in February (later revised downward to a 219k gain). Then on Friday, we learned that March payrolls only grew by 98k, vs. a forecast of 180k. Thus job growth in March came in like a lion, and went out like a lamb.
Of course, the anti-Trumpers cited this as an "aha" moment, pointing to the number as evidence that job growth was stalling out under the new administration. The appropriate response to which is "balderdash."
First, January and February saw big gains in construction jobs, in part because of very mild winter weather across nearly all of the U.S. This effectively front-loaded the usual spring construction season. That sector only gained 6,000 jobs in March, as heavy snowstorms cut across much of the nation. Weather-related work absences in March totaled 164k.
Second, there was a big drop in retail employment. It's probably too late in the year to attribute that to seasonality (temporary retail hiring picks up in late October and November, with cuts typically coming in January). The more likely culprit is the fact that brick-and-mortar retail is largely dying. However, consumer spending is not falling; it's just that online sales are supplanting brick-and-mortar buying. In other words, Amazon is replacing Sears.
Now, Amazon needn't hire as many retail workers as Sears and Penney's, thanks to technology, so we may be seeing a trend in declining retail employment for some time to come. Of course, those on the left will bemoan this, but it's a natural occurrence as technology advances. McDonald's is hiring fewer order-takers at the counter (especially now that it has to pay them $15/hour in some locales) because they've installed self-serve order kiosks and encouraged app orders.
That trend, too, is decried by the left. But two points are in order: one, those counter jobs were never supposed to be career positions, paying a high enough wage to support a family, so forcing McDonald's to do so was bound to invite technological advances. (One acquaintance criticized McDonald's, saying that for the cost of developing the kiosk technology, they could have just paid all their workers $15/hour. He neglected to consider that, once the investment in technology is made and the kiosks are installed, they basically work for "free" - other than maintenance and connectivity costs - until they crap out. Plus they'll never ask for a raise.) And two, technology has been replacing low-level jobs that can be automated since the Industrial Revolution.
For example, there are a lot fewer blacksmiths in America than there were a couple of centuries ago. But are those who bemoan the loss of jobs to technology really willing to sell their cars and ride a horse to work? Besides, I'll bet many of those who call for even the most menial of jobs to pay $15/hour ride Uber, and we've seen what that technology has done to the taxi industry (it's even resulted in the failure of several financial institutions that concentrated in lending collateralized by taxi medallions).
This is called disruption, folks. It's here to stay, and it's only going to accelerate.
A third point regarding the March payroll number is one that I've made relentlessly since I started doing economic analysis more than a quarter-century ago:
"One month doth not a trend make."
Yes, March payrolls only grew by 98k. Consider that in May 2016, payrolls only grew by 43k. And yet, the sky did not fall. The economy did not go into a tailspin. The world did not end.
Indeed, June 2016 payrolls surged by 297k. So now that better weather has returned, we may well see a strong showing in the April data. That's what tends to happen; a weak payrolls report is often followed by a surge, as exogenous factors such as weather result in a strong catch-up effect.
It's important to ignore the media's focus on the worst aspects of an economic report, and look behind the headline numbers. And there was a lot of good news in the March jobs report: wage growth held at 2.7%. The unemployment rate fell to 4.5% as the number of unemployed declined by 326k. The civilian labor force grew by 145k, as discouraged unemployed persons continue to be attracted back into the labor market.
Further, the stock market took the report in stride, with the Dow only giving up seven points (that's 0.03%). If the report didn't rattle those who understand this stuff, why should it rattle anyone else?
Here's an example of how the media - even the business media - distorts the data: CNBC (part of the NBC family, which includes the far-left outlet MSNBC) reported on the downward revisions to the January and February payrolls numbers as follows:
"January's growth was reduced from 238,000 to 216,000, while February fell from 235,000 to 219,000, equating to a total decline of 38,000" (italics added).
Uhh, no. That doesn't equate to a total decline of 38,000. It equates to a total two-month gain of 435,000, vs. a previously estimated gain of 473,000.
Unfortunately, CNBC doesn't really know better. Sure, it employs some knowledgeable folks, like Jim Cramer on the equity side and Rick Santelli on the fixed-income side. But Steve Liesman, CNBC's senior economics reporter, holds a B.A. in English and an M.S. in Journalism. Those are hardly the credentials I'd want in a senior economics reporter, and I've known Liesman to be wrong a lot more than he's been right over the decade or so that I've been watching him.
Sadly, most Americans don't know better either. They rely too heavily on the headlines, from the business media or - worse yet - the mainstream media.
But that's what your friendly neighborhood Curmudgeon is here for: to set the record straight, and help look behind the numbers, separating the kernels of truth from the chaff of yellow journalism. Know the numbers, and the numbers shall set ye free.
Of course, the anti-Trumpers cited this as an "aha" moment, pointing to the number as evidence that job growth was stalling out under the new administration. The appropriate response to which is "balderdash."
First, January and February saw big gains in construction jobs, in part because of very mild winter weather across nearly all of the U.S. This effectively front-loaded the usual spring construction season. That sector only gained 6,000 jobs in March, as heavy snowstorms cut across much of the nation. Weather-related work absences in March totaled 164k.
Second, there was a big drop in retail employment. It's probably too late in the year to attribute that to seasonality (temporary retail hiring picks up in late October and November, with cuts typically coming in January). The more likely culprit is the fact that brick-and-mortar retail is largely dying. However, consumer spending is not falling; it's just that online sales are supplanting brick-and-mortar buying. In other words, Amazon is replacing Sears.
Now, Amazon needn't hire as many retail workers as Sears and Penney's, thanks to technology, so we may be seeing a trend in declining retail employment for some time to come. Of course, those on the left will bemoan this, but it's a natural occurrence as technology advances. McDonald's is hiring fewer order-takers at the counter (especially now that it has to pay them $15/hour in some locales) because they've installed self-serve order kiosks and encouraged app orders.
That trend, too, is decried by the left. But two points are in order: one, those counter jobs were never supposed to be career positions, paying a high enough wage to support a family, so forcing McDonald's to do so was bound to invite technological advances. (One acquaintance criticized McDonald's, saying that for the cost of developing the kiosk technology, they could have just paid all their workers $15/hour. He neglected to consider that, once the investment in technology is made and the kiosks are installed, they basically work for "free" - other than maintenance and connectivity costs - until they crap out. Plus they'll never ask for a raise.) And two, technology has been replacing low-level jobs that can be automated since the Industrial Revolution.
For example, there are a lot fewer blacksmiths in America than there were a couple of centuries ago. But are those who bemoan the loss of jobs to technology really willing to sell their cars and ride a horse to work? Besides, I'll bet many of those who call for even the most menial of jobs to pay $15/hour ride Uber, and we've seen what that technology has done to the taxi industry (it's even resulted in the failure of several financial institutions that concentrated in lending collateralized by taxi medallions).
This is called disruption, folks. It's here to stay, and it's only going to accelerate.
A third point regarding the March payroll number is one that I've made relentlessly since I started doing economic analysis more than a quarter-century ago:
"One month doth not a trend make."
Yes, March payrolls only grew by 98k. Consider that in May 2016, payrolls only grew by 43k. And yet, the sky did not fall. The economy did not go into a tailspin. The world did not end.
Indeed, June 2016 payrolls surged by 297k. So now that better weather has returned, we may well see a strong showing in the April data. That's what tends to happen; a weak payrolls report is often followed by a surge, as exogenous factors such as weather result in a strong catch-up effect.
It's important to ignore the media's focus on the worst aspects of an economic report, and look behind the headline numbers. And there was a lot of good news in the March jobs report: wage growth held at 2.7%. The unemployment rate fell to 4.5% as the number of unemployed declined by 326k. The civilian labor force grew by 145k, as discouraged unemployed persons continue to be attracted back into the labor market.
Further, the stock market took the report in stride, with the Dow only giving up seven points (that's 0.03%). If the report didn't rattle those who understand this stuff, why should it rattle anyone else?
Here's an example of how the media - even the business media - distorts the data: CNBC (part of the NBC family, which includes the far-left outlet MSNBC) reported on the downward revisions to the January and February payrolls numbers as follows:
"January's growth was reduced from 238,000 to 216,000, while February fell from 235,000 to 219,000, equating to a total decline of 38,000" (italics added).
Uhh, no. That doesn't equate to a total decline of 38,000. It equates to a total two-month gain of 435,000, vs. a previously estimated gain of 473,000.
Unfortunately, CNBC doesn't really know better. Sure, it employs some knowledgeable folks, like Jim Cramer on the equity side and Rick Santelli on the fixed-income side. But Steve Liesman, CNBC's senior economics reporter, holds a B.A. in English and an M.S. in Journalism. Those are hardly the credentials I'd want in a senior economics reporter, and I've known Liesman to be wrong a lot more than he's been right over the decade or so that I've been watching him.
Sadly, most Americans don't know better either. They rely too heavily on the headlines, from the business media or - worse yet - the mainstream media.
But that's what your friendly neighborhood Curmudgeon is here for: to set the record straight, and help look behind the numbers, separating the kernels of truth from the chaff of yellow journalism. Know the numbers, and the numbers shall set ye free.
Sunday, March 26, 2017
A Taxing Proposition: Understanding Supply-Side Economics
Another long read (maybe 15 minutes), but hopefully a worthwhile one.
Having recognized the futility of trying to get a divided GOP to pass health care reform, President Trump has decided to leave that alone until Obamacare finally implodes, and move on to tax reform.
I'm not going to propose a tax plan here; there are a number of things that would improve the current tax code and structure, and I could live with anything from the streamlined set of income brackets and reduced rates proposed by the administration, to a flat tax.
Instead, I'm going to provide some much-needed education regarding supply-side economics, which has become known as "trickle-down economics," mostly by its detractors.
The idea is this: provide tax breaks for businesses and high-income individuals (who are often small business owners, and thus provide jobs for others, but don't incorporate and must therefore pay their business taxes at the top individual rate), and the benefits will "trickle down" to lower tax brackets.
The term "supply-side" comes from the idea that you're providing tax benefits to those that are net suppliers in the economy - businesses - and they'll create more jobs, both directly and indirectly from purchasing more of the items necessary to production, which in turn will benefit the companies that provide those items, etc., etc.
That lowering taxes on businesses both large and small is good for the economy overall is so basic a notion that it shouldn't bear further explanation. If it does, I probably can't help you: I can explain it to you, but I can't understand it for you. However, I will offer a fundamental primer.
Consider the case of a small manufacturer. Let's assume it doesn't import or export anything, nor does it operate outside the U.S. That will keep it simple. Let's further assume it manufactures something everyone needs - say, widgets.
Our manufacturer has various cost inputs: labor, materials, plant and equipment. It has to cover its costs and provide a return to its owners; after all, that's why they're in business. It isn't evil, it's called making a living. A business's primary responsibility is to maximize shareholders' returns. For those who decry that concept, look at your 401k holdings. Chances are, you're one of those shareholders.
Back to our manufacturer. It divides its total costs by the number of widgets it produces to determine the unit cost, then it prices the widgets at a reasonable profit margin above that.
One of the cost inputs is taxes. So if the corporate tax rate is 35%, that gets factored into unit costs, and the profit margin is added on top of that. Thus, the price of a widget is higher than it would be if the corporate tax rate were 15%.
In other words, if the corporate tax rate is 35%, corporations don't ultimately pay that - consumers do. You and me.
Further, if the cost of widgets is lower, maybe we'll buy more, meaning our manufacturer can sell more. So it expands, and hires more workers. That means more jobs. Those workers buy groceries, etc., so the grocers and etc. providers hire more workers and create more jobs. And on and on it goes.
In addition, the manufacturer pays more taxes, because it's selling more widgets, and making more money. At some point, it might be paying more than if the tax rate were still 35%. That's simple math: 35% of income at $1M per year is less than 15% of income at $2.5M per year. Beyond that, the additional workers the manufacturer hires also pay taxes, so the individual tax burden is distributed across a wider swath of taxpayers, and all of us can enjoy lower tax rates as a result. The grocers and etc. providers, and their employees, also pay taxes, so tax receipts may actually go up as tax rates go down.
But if the corporate tax rate remains at 35%, we all pay more for widgets, so we don't buy more. The manufacturer doesn't hire any additional workers, and the grocers and etc. providers don't benefit. Tax receipts don't increase, thus tax rates can't be cut because the overall tax burden is still shared by the same (relatively) small cohort of taxpayers. Thus we have high taxes, low output growth, and anemic wage growth. Sound familiar? It should - that's been the status quo for the past several years.
To make matters worse, if Ireland comes along and offers our widget-maker a 20% corporate tax rate and a skilled labor pool, the company might fire its U.S. workers and set up shop on the Emerald Isle. Thus employment in the U.S. shrinks, and you and I wind up paying more in taxes to make up for the lost tax revenue from the displaced workers. Plus the U.S. gives up the corporate tax revenue altogether.
Now, let's move beyond that to the other piece of the supply-side equation: consumption. This is where the "trickle-down" concept is most frequently misunderstood.
The argument against "trickle-down economics" in a consumption context goes like this:
"Give a poor man a dollar, and he'll spend it. Give a rich man a dollar, and he'll save it."
Well, it's a theory. I suppose its attractiveness is its simplicity, meaning that simple people with no understanding of economics can grasp it.
The problem is, it's wrong on so many counts that I hardly know where to begin debunking it. But I'll take a shot. Here's another annoying numbered list:
1. It assumes what we hear all the time, that consumption is the true engine of economic growth. People like to crow that "consumption has always represented 70% of GDP," without even knowing what makes up GDP.
GDP - gross domestic product - is a measure of a nation's economic output. The equation is:
GDP = C + I + G + (Ex - Im), where C = spending by consumers, or consumption; I = business spending, or investment; G = government spending; Ex = exports; and Im = imports. In other words, output is the sum of consumption, business and government spending, and net exports.
A simple google search of "consumption as a percentage of GDP" produces an article from Policy.Mic as the first hit. The article begins thus:
"It seems most people understand, personal consumption drives the American economy. Personal consumption historically represents 70% of our nation's GDP" (italics added).
Wrong. The truth is, personal consumption expenditures have never reached 70% of GDP. Currently, the figure is 68.9%. The peak was 69.1%, in Q1 2011. Ah, you say, you're nitpicking - just round up.
Okay, let's look at the "historically" part of the assertion. The economy was rocking from 1983-1990, and consumption averaged about 63% of GDP. After the '90-91 recession, the economy again took off until the dot-com bubble burst in 2000, and consumption averaged about 65% of GDP during that period. Consumption never even hit two-thirds of GDP until 2001. So the dependence of output growth on consumption is a fairly recent phenomenon (consumption averaged less than 60% of GDP during the 1961-1970 expansion).
Now, I'll grant you that consumption has always been the dominant piece of the equation - after all, there are four components of GDP, and consumption has indeed historically represented more than half of output.
However, if you study the history of the stock market, which correlates with economic growth, here's what you'll find. Market performance since the Crash of 1929 can be broken down into roughly 15 to 20-year "supercycles," with the market trending generally either up or sideways. To be sure, the market had its ups and downs within each of those cycles. But endpoint-to-endpoint, the market was significantly higher at the end of the up cycles, while it was flat at the end of the sideways cycles - in other words, during the sideways cycles, you'd have been as well off keeping your money under your mattress as in the markets.
The drivers of those cycles vary: WWII, the energy crisis of the '70s, the credit-driven recession of '90-91, the dot-com bubble, the housing bubble. There will always be asset price disruptions within one asset class or another.
However, we can find one common denominator that corresponds to the beginnings of each up supercycle: the savings rate was near or above 10%.
Thus savings, boys and girls, is the true engine of growth. That only stands to reason: savings provides banks with money to lend to individuals and businesses, which provides capital for business expansion, etc. Consumption only fuels today's purchases.
(If you doubt the veracity of this research, please know that I used it as the basis of a prediction I made at an economic conference in 2000: that the stock market would trade sideways for the next 13 years or so. Then compare the S&P 500 at its 2000 peak vs. 2013.)
So, back to our adage that a rich man, given a dollar, will save it. Even if that were true - which it's not - it would be a good thing in terms of long-term, sustainable economic growth, the engine of which is savings, not spending.
2. There's no evidence to suggest that a rich man, given a windfall of a dollar, will save it rather than spend it. The notion is conjured up from hate-the-rich images of Ebenezer Scrooge, pinching every last penny while leading a miserly life. Most rich folks don't behave that way.
Real conventional wisdom would tell us that most rich folk got that way by saving what they needed before they were rich (or by inheriting wealth, in which case their forebears did the saving for them), and are now free to spend their discretionary dollars gained through windfalls like tax cuts. And they spend a heck of a lot more than us peons do.
The rich buy yachts. They buy jets. (Just watch "Selling Yachts" or "Selling Jets" on AWE.) They vacation abroad. They buy expensive jewelry and clothing. They eat at fancy restaurants. They buy Mercedes and BMWs. (Note that this applies to the "rich" in a broad swath from the uber-rich to many among us; after all, an income of $135,000 for a 35-year-old would put him or her in "the 1%," and there are plenty of 35-year-olds earning that income level driving Beemers and vacationing in St. Thomas.)
To wit, the stock price of Tiffany (the high-end jewelry retailer) is often used by market observers as an indicator of a strong economy, while Wal-Mart's stock price can be indicative of a relatively weak one. Here's the idea: when incomes and wealth are rising, for whatever reason, people who shop at Tiffany spend more there. Conversely, when incomes and wealth are falling, everyone is shopping at Wal-Mart, so that stock does well.
The last meaningful attempt at tax reform was the Tax Reform Act of 1986, which included a supply-side tax cut for the top brackets and corporations. Tiffany went public a few months after the TRA was signed into law, and by the onset of recession in 1990, its stock price had more than doubled. Granted, other things were going on at the time besides lower taxes. But again, we can draw no inference to suggest that the tax savings of those in the top brackets were saved and not spent.
See, the poor typically don't shop at Tiffany (I sure don't, and I'm not poor). So it had to be "the rich man" driving Tiffany's stock performance after the TRA, putting the lie to the notion that the rich man saves his tax windfalls, while the poor man spends it. (Folks of lesser means do spend their windfalls, but they spend them on less expensive items - it just adds up more at the top brackets.)
So what good does that do the rest of us? Well, the sales clerk at Tiffany probably isn't rich, so he benefits when the company does well. Tiffany sells online, so it will hire more warehouse workers when sales are strong. Those workers buy groceries and modest cars and take vacations, however inexpensive, so the grocers and auto workers and motel employees make more money.
In other words, the benefits trickle down.
Consider a more direct and recent example. When gas prices fell precipitously in 2014, it was like a tax cut for nearly all Americans (at least, those employed outside the energy sector). Many observers moaned, however, that consumer spending didn't increase, and thus inferred that people were saving, rather than spending, their gas price windfall.
But they were wrong. Consumer spending did indeed remain flat. However, spending is like a pie. The overall pie didn't get bigger, but one slice - spending on gasoline - got considerably smaller. That means other pieces had to get bigger. Thus discretionary spending did increase.
I dug a little deeper into the spending data a couple of years ago to see which pieces of the pie grew the most. And the two categories that showed the largest increases in spending were dining out and entertainment, and leisure travel, especially foreign travel.
So both rich and poor spent some of their windfall - all of it, in fact, as the overall pie remained the same size and the savings rate didn't increase. Both rich and poor dine out, and they take vacations.
But the poor may dine out at fast food outlets, while the relatively well-to-do will dine out at higher-end restaurants. The poor take vacations, but typically not abroad. The fact that these discretionary spending categories increased to the extent they did - especially foreign leisure travel - clearly indicates that the rich were spending, and not saving, their "gas tax cut." It takes a lot of additional McDonald's diners to equate to one additional dinner out at Chez Foo-Foo. So a big increase in spending has to reflect spending at the highest income levels, not just the lowest.
So the rich man/poor man myth is just that - a myth.
Detractors of supply-side economics further say "it has never worked." First, it worked okay in the late '80s. And second, the only reason it has never worked long-term is because the populists who don't understand it but see it as a regressive policy won't let it alone.
Putting any economic theory into practice is an experiment, and like any other experiment, in order to determine whether it proved the hypothesis, we have to control the other variables. So when an administration has to bargain with the supply-side detractors, throwing them bones in exchange for supply-side tax cuts, it muddies the waters. President Reagan, for example, had to hand the Democrats huge increases in spending to get the TRA passed. That, coupled with the defense spending build-up that was necessary to end the Cold War, resulted in huge deficits.
So the Democrats concluded that trickle-down economics causes deficits. No, it doesn't. Excessive government spending causes deficits, unless you tax everybody to the moon and back to pay for the spending. Reasonable tax policy has to be coupled with reasonable spending. In other words, control the spending variable, and supply-side tax policy works.
Don't believe me? Let's try it. Let's really give it a chance to work. If you're not willing to do that, please show me where I'm wrong.
But you'll have to do better than come up with some simplistic and wrong-headed platitude of a theory like the rich man/poor man myth. Shooting that nonsense down is like hunting for squirrels with a howitzer.
Having recognized the futility of trying to get a divided GOP to pass health care reform, President Trump has decided to leave that alone until Obamacare finally implodes, and move on to tax reform.
I'm not going to propose a tax plan here; there are a number of things that would improve the current tax code and structure, and I could live with anything from the streamlined set of income brackets and reduced rates proposed by the administration, to a flat tax.
Instead, I'm going to provide some much-needed education regarding supply-side economics, which has become known as "trickle-down economics," mostly by its detractors.
The idea is this: provide tax breaks for businesses and high-income individuals (who are often small business owners, and thus provide jobs for others, but don't incorporate and must therefore pay their business taxes at the top individual rate), and the benefits will "trickle down" to lower tax brackets.
The term "supply-side" comes from the idea that you're providing tax benefits to those that are net suppliers in the economy - businesses - and they'll create more jobs, both directly and indirectly from purchasing more of the items necessary to production, which in turn will benefit the companies that provide those items, etc., etc.
That lowering taxes on businesses both large and small is good for the economy overall is so basic a notion that it shouldn't bear further explanation. If it does, I probably can't help you: I can explain it to you, but I can't understand it for you. However, I will offer a fundamental primer.
Consider the case of a small manufacturer. Let's assume it doesn't import or export anything, nor does it operate outside the U.S. That will keep it simple. Let's further assume it manufactures something everyone needs - say, widgets.
Our manufacturer has various cost inputs: labor, materials, plant and equipment. It has to cover its costs and provide a return to its owners; after all, that's why they're in business. It isn't evil, it's called making a living. A business's primary responsibility is to maximize shareholders' returns. For those who decry that concept, look at your 401k holdings. Chances are, you're one of those shareholders.
Back to our manufacturer. It divides its total costs by the number of widgets it produces to determine the unit cost, then it prices the widgets at a reasonable profit margin above that.
One of the cost inputs is taxes. So if the corporate tax rate is 35%, that gets factored into unit costs, and the profit margin is added on top of that. Thus, the price of a widget is higher than it would be if the corporate tax rate were 15%.
In other words, if the corporate tax rate is 35%, corporations don't ultimately pay that - consumers do. You and me.
Further, if the cost of widgets is lower, maybe we'll buy more, meaning our manufacturer can sell more. So it expands, and hires more workers. That means more jobs. Those workers buy groceries, etc., so the grocers and etc. providers hire more workers and create more jobs. And on and on it goes.
In addition, the manufacturer pays more taxes, because it's selling more widgets, and making more money. At some point, it might be paying more than if the tax rate were still 35%. That's simple math: 35% of income at $1M per year is less than 15% of income at $2.5M per year. Beyond that, the additional workers the manufacturer hires also pay taxes, so the individual tax burden is distributed across a wider swath of taxpayers, and all of us can enjoy lower tax rates as a result. The grocers and etc. providers, and their employees, also pay taxes, so tax receipts may actually go up as tax rates go down.
But if the corporate tax rate remains at 35%, we all pay more for widgets, so we don't buy more. The manufacturer doesn't hire any additional workers, and the grocers and etc. providers don't benefit. Tax receipts don't increase, thus tax rates can't be cut because the overall tax burden is still shared by the same (relatively) small cohort of taxpayers. Thus we have high taxes, low output growth, and anemic wage growth. Sound familiar? It should - that's been the status quo for the past several years.
To make matters worse, if Ireland comes along and offers our widget-maker a 20% corporate tax rate and a skilled labor pool, the company might fire its U.S. workers and set up shop on the Emerald Isle. Thus employment in the U.S. shrinks, and you and I wind up paying more in taxes to make up for the lost tax revenue from the displaced workers. Plus the U.S. gives up the corporate tax revenue altogether.
Now, let's move beyond that to the other piece of the supply-side equation: consumption. This is where the "trickle-down" concept is most frequently misunderstood.
The argument against "trickle-down economics" in a consumption context goes like this:
"Give a poor man a dollar, and he'll spend it. Give a rich man a dollar, and he'll save it."
Well, it's a theory. I suppose its attractiveness is its simplicity, meaning that simple people with no understanding of economics can grasp it.
The problem is, it's wrong on so many counts that I hardly know where to begin debunking it. But I'll take a shot. Here's another annoying numbered list:
1. It assumes what we hear all the time, that consumption is the true engine of economic growth. People like to crow that "consumption has always represented 70% of GDP," without even knowing what makes up GDP.
GDP - gross domestic product - is a measure of a nation's economic output. The equation is:
GDP = C + I + G + (Ex - Im), where C = spending by consumers, or consumption; I = business spending, or investment; G = government spending; Ex = exports; and Im = imports. In other words, output is the sum of consumption, business and government spending, and net exports.
A simple google search of "consumption as a percentage of GDP" produces an article from Policy.Mic as the first hit. The article begins thus:
"It seems most people understand, personal consumption drives the American economy. Personal consumption historically represents 70% of our nation's GDP" (italics added).
Wrong. The truth is, personal consumption expenditures have never reached 70% of GDP. Currently, the figure is 68.9%. The peak was 69.1%, in Q1 2011. Ah, you say, you're nitpicking - just round up.
Okay, let's look at the "historically" part of the assertion. The economy was rocking from 1983-1990, and consumption averaged about 63% of GDP. After the '90-91 recession, the economy again took off until the dot-com bubble burst in 2000, and consumption averaged about 65% of GDP during that period. Consumption never even hit two-thirds of GDP until 2001. So the dependence of output growth on consumption is a fairly recent phenomenon (consumption averaged less than 60% of GDP during the 1961-1970 expansion).
Now, I'll grant you that consumption has always been the dominant piece of the equation - after all, there are four components of GDP, and consumption has indeed historically represented more than half of output.
However, if you study the history of the stock market, which correlates with economic growth, here's what you'll find. Market performance since the Crash of 1929 can be broken down into roughly 15 to 20-year "supercycles," with the market trending generally either up or sideways. To be sure, the market had its ups and downs within each of those cycles. But endpoint-to-endpoint, the market was significantly higher at the end of the up cycles, while it was flat at the end of the sideways cycles - in other words, during the sideways cycles, you'd have been as well off keeping your money under your mattress as in the markets.
The drivers of those cycles vary: WWII, the energy crisis of the '70s, the credit-driven recession of '90-91, the dot-com bubble, the housing bubble. There will always be asset price disruptions within one asset class or another.
However, we can find one common denominator that corresponds to the beginnings of each up supercycle: the savings rate was near or above 10%.
Thus savings, boys and girls, is the true engine of growth. That only stands to reason: savings provides banks with money to lend to individuals and businesses, which provides capital for business expansion, etc. Consumption only fuels today's purchases.
(If you doubt the veracity of this research, please know that I used it as the basis of a prediction I made at an economic conference in 2000: that the stock market would trade sideways for the next 13 years or so. Then compare the S&P 500 at its 2000 peak vs. 2013.)
So, back to our adage that a rich man, given a dollar, will save it. Even if that were true - which it's not - it would be a good thing in terms of long-term, sustainable economic growth, the engine of which is savings, not spending.
2. There's no evidence to suggest that a rich man, given a windfall of a dollar, will save it rather than spend it. The notion is conjured up from hate-the-rich images of Ebenezer Scrooge, pinching every last penny while leading a miserly life. Most rich folks don't behave that way.
Real conventional wisdom would tell us that most rich folk got that way by saving what they needed before they were rich (or by inheriting wealth, in which case their forebears did the saving for them), and are now free to spend their discretionary dollars gained through windfalls like tax cuts. And they spend a heck of a lot more than us peons do.
The rich buy yachts. They buy jets. (Just watch "Selling Yachts" or "Selling Jets" on AWE.) They vacation abroad. They buy expensive jewelry and clothing. They eat at fancy restaurants. They buy Mercedes and BMWs. (Note that this applies to the "rich" in a broad swath from the uber-rich to many among us; after all, an income of $135,000 for a 35-year-old would put him or her in "the 1%," and there are plenty of 35-year-olds earning that income level driving Beemers and vacationing in St. Thomas.)
To wit, the stock price of Tiffany (the high-end jewelry retailer) is often used by market observers as an indicator of a strong economy, while Wal-Mart's stock price can be indicative of a relatively weak one. Here's the idea: when incomes and wealth are rising, for whatever reason, people who shop at Tiffany spend more there. Conversely, when incomes and wealth are falling, everyone is shopping at Wal-Mart, so that stock does well.
The last meaningful attempt at tax reform was the Tax Reform Act of 1986, which included a supply-side tax cut for the top brackets and corporations. Tiffany went public a few months after the TRA was signed into law, and by the onset of recession in 1990, its stock price had more than doubled. Granted, other things were going on at the time besides lower taxes. But again, we can draw no inference to suggest that the tax savings of those in the top brackets were saved and not spent.
See, the poor typically don't shop at Tiffany (I sure don't, and I'm not poor). So it had to be "the rich man" driving Tiffany's stock performance after the TRA, putting the lie to the notion that the rich man saves his tax windfalls, while the poor man spends it. (Folks of lesser means do spend their windfalls, but they spend them on less expensive items - it just adds up more at the top brackets.)
So what good does that do the rest of us? Well, the sales clerk at Tiffany probably isn't rich, so he benefits when the company does well. Tiffany sells online, so it will hire more warehouse workers when sales are strong. Those workers buy groceries and modest cars and take vacations, however inexpensive, so the grocers and auto workers and motel employees make more money.
In other words, the benefits trickle down.
Consider a more direct and recent example. When gas prices fell precipitously in 2014, it was like a tax cut for nearly all Americans (at least, those employed outside the energy sector). Many observers moaned, however, that consumer spending didn't increase, and thus inferred that people were saving, rather than spending, their gas price windfall.
But they were wrong. Consumer spending did indeed remain flat. However, spending is like a pie. The overall pie didn't get bigger, but one slice - spending on gasoline - got considerably smaller. That means other pieces had to get bigger. Thus discretionary spending did increase.
I dug a little deeper into the spending data a couple of years ago to see which pieces of the pie grew the most. And the two categories that showed the largest increases in spending were dining out and entertainment, and leisure travel, especially foreign travel.
So both rich and poor spent some of their windfall - all of it, in fact, as the overall pie remained the same size and the savings rate didn't increase. Both rich and poor dine out, and they take vacations.
But the poor may dine out at fast food outlets, while the relatively well-to-do will dine out at higher-end restaurants. The poor take vacations, but typically not abroad. The fact that these discretionary spending categories increased to the extent they did - especially foreign leisure travel - clearly indicates that the rich were spending, and not saving, their "gas tax cut." It takes a lot of additional McDonald's diners to equate to one additional dinner out at Chez Foo-Foo. So a big increase in spending has to reflect spending at the highest income levels, not just the lowest.
So the rich man/poor man myth is just that - a myth.
Detractors of supply-side economics further say "it has never worked." First, it worked okay in the late '80s. And second, the only reason it has never worked long-term is because the populists who don't understand it but see it as a regressive policy won't let it alone.
Putting any economic theory into practice is an experiment, and like any other experiment, in order to determine whether it proved the hypothesis, we have to control the other variables. So when an administration has to bargain with the supply-side detractors, throwing them bones in exchange for supply-side tax cuts, it muddies the waters. President Reagan, for example, had to hand the Democrats huge increases in spending to get the TRA passed. That, coupled with the defense spending build-up that was necessary to end the Cold War, resulted in huge deficits.
So the Democrats concluded that trickle-down economics causes deficits. No, it doesn't. Excessive government spending causes deficits, unless you tax everybody to the moon and back to pay for the spending. Reasonable tax policy has to be coupled with reasonable spending. In other words, control the spending variable, and supply-side tax policy works.
Don't believe me? Let's try it. Let's really give it a chance to work. If you're not willing to do that, please show me where I'm wrong.
But you'll have to do better than come up with some simplistic and wrong-headed platitude of a theory like the rich man/poor man myth. Shooting that nonsense down is like hunting for squirrels with a howitzer.
Saturday, March 25, 2017
Brief Random Musings on a Saturday Night
As I once again work on my taxes, I'm reminded of how desperately we need comprehensive tax reform and simplification. I would gladly forego every deduction I claim for a simple tax code with reasonable rates. Just calculate the effective rate paid by taxpayers in each income bracket AFTER deductions, then set the rate there and eliminate the deductions. Regaining the lost hours of my life devoted to this wholly needless exercise would be worth more to me than all the deductions I could claim. (And my next post will be devoted to taxes, more from an economic angle than political, so stay tuned.)
*************************
Once again, a recalcitrant Congress has dug in its heels and refused to pass a much-needed, if imperfect, piece of legislation. So here we are, stuck with Obamacare. The Democrats are celebrating as though Americans having to pay twice as much for half the choice in health care is a good thing.
What bothers me the most is that the Freedom Caucus never offered alternative solutions to the pieces of the AHCA they didn't like, they just sat back and said, "I don't like this," and "I don't like that." We finally elect a do-something President, and we remain saddled - and he remains hamstrung - with a do-nothing Congress. Looks like we haven't gone far enough in cleaning house since 2010. Time for us to help drain the swamp.
If I were Trump, I'd campaign in the 2018 primaries for anyone willing to oppose the incumbent members of the caucus. Good thing there are none from my neck of the woods, because I sure know how I'd vote come 2018.
*************************
So Chelsea Clinton is receiving a Lifetime Achievement Award at the ripe young age of 37. (I admit I haven't even bothered to learn what for, as I don't really care.)
Critics claim she hasn't even had a lifetime yet, given her young age. Her supporters no doubt would crow that Ms. Clinton has achieved more in her 37 years than many people do in a lifetime.
I doubt I could dispute either point. However, regarding her achievements, I believe it noteworthy that she was born to a pair of Yalies, at a time when her dad was governor of Arkansas. She grew up in the White House, mum and dad sent her to Stanford, and she parlayed her parents' fame and power into a lucrative career, with much of it coming as a key player in her parents' foundation.
We know all about that foundation, don't we?
If I'm going to give a Lifetime Achievement Award to a thirty-something, I'd rather give it to Chieh Huang, CEO of Boxed. Boxed is an innovative app-based retail concept that provides the bulk-buying advantages of a Costco or Sam's (but without the membership fee) combined with home delivery for us lazy people.
Huang is the son of poor Taiwanese immigrants. His parents struggled to find good jobs in the U.S. due to their lack of fluency in English. His mother worked as a cashier in a Chinese restaurant, and his father, during his brief periods of employment, sold anything he could find a buyer for, from stationery to sporting goods.
As reported in Entrepreneur magazine, "when Chieh Huang was in first grade, his class went on a field trip to the aquarium. The teacher had asked parents to give their children a few dollars for souvenirs. Huang was the only child who brought none; his parents couldn't afford to spare any. A trip chaperone bought him a 25-cent purple eraser. He treasured it for years and years."
That's a bit different from Chelsea's upbringing, no? Bill Clinton's parents weren't wealthy, but they weren't poor. Hillary's parents, however, were well-to-do. And Hillary never worked as a restaurant cashier, although Bill did his fair share of selling (mostly snake oil).
Boxed isn't a public company, but I'm betting that it soon will be, and when it goes public, as Jim Cramer would say, "BUYBUYBUYBUYBUY!"
But besides the success of the company, Huang hasn't forgotten what it was like to grow up poor and cherish an eraser bought on a field trip.
His company pays for its employees' children's college tuition (Huang used his own stake in the company to fund that initiative). That includes everyone from managers to pickers in the company's fulfillment centers.
Boxed also takes care of the costs of employees' personal crises when it can, recognizing what I've always said: the customer doesn't come first, the employee does. Put your people first, and they'll go the extra mile for the customer.
Huang is 33. And I'd argue that, when one considers from where he started, to where he is today, his "lifetime" of achievement overwhelms Chelsea's. It's easy to reach the top rung when you start from the one below it. It's entirely another endeavor when you don't even get to start on the ladder.
However, I doubt Huang seeks the kinds of accolades that float Chelsea Clinton's boat. He's not looking for feathers in his cap, but he's certainly earning jewels in his crown by making a real difference in people's lives, from his customers through his innovative ideas, to his employees and their families through his generosity.
Besides, Chelsea winning a Lifetime Achievement Award at age 37 is little different from Barack Obama winning a Nobel Peace Prize ten months after his inauguration.
*************************
Once again, a recalcitrant Congress has dug in its heels and refused to pass a much-needed, if imperfect, piece of legislation. So here we are, stuck with Obamacare. The Democrats are celebrating as though Americans having to pay twice as much for half the choice in health care is a good thing.
What bothers me the most is that the Freedom Caucus never offered alternative solutions to the pieces of the AHCA they didn't like, they just sat back and said, "I don't like this," and "I don't like that." We finally elect a do-something President, and we remain saddled - and he remains hamstrung - with a do-nothing Congress. Looks like we haven't gone far enough in cleaning house since 2010. Time for us to help drain the swamp.
If I were Trump, I'd campaign in the 2018 primaries for anyone willing to oppose the incumbent members of the caucus. Good thing there are none from my neck of the woods, because I sure know how I'd vote come 2018.
*************************
So Chelsea Clinton is receiving a Lifetime Achievement Award at the ripe young age of 37. (I admit I haven't even bothered to learn what for, as I don't really care.)
Critics claim she hasn't even had a lifetime yet, given her young age. Her supporters no doubt would crow that Ms. Clinton has achieved more in her 37 years than many people do in a lifetime.
I doubt I could dispute either point. However, regarding her achievements, I believe it noteworthy that she was born to a pair of Yalies, at a time when her dad was governor of Arkansas. She grew up in the White House, mum and dad sent her to Stanford, and she parlayed her parents' fame and power into a lucrative career, with much of it coming as a key player in her parents' foundation.
We know all about that foundation, don't we?
If I'm going to give a Lifetime Achievement Award to a thirty-something, I'd rather give it to Chieh Huang, CEO of Boxed. Boxed is an innovative app-based retail concept that provides the bulk-buying advantages of a Costco or Sam's (but without the membership fee) combined with home delivery for us lazy people.
Huang is the son of poor Taiwanese immigrants. His parents struggled to find good jobs in the U.S. due to their lack of fluency in English. His mother worked as a cashier in a Chinese restaurant, and his father, during his brief periods of employment, sold anything he could find a buyer for, from stationery to sporting goods.
As reported in Entrepreneur magazine, "when Chieh Huang was in first grade, his class went on a field trip to the aquarium. The teacher had asked parents to give their children a few dollars for souvenirs. Huang was the only child who brought none; his parents couldn't afford to spare any. A trip chaperone bought him a 25-cent purple eraser. He treasured it for years and years."
That's a bit different from Chelsea's upbringing, no? Bill Clinton's parents weren't wealthy, but they weren't poor. Hillary's parents, however, were well-to-do. And Hillary never worked as a restaurant cashier, although Bill did his fair share of selling (mostly snake oil).
Boxed isn't a public company, but I'm betting that it soon will be, and when it goes public, as Jim Cramer would say, "BUYBUYBUYBUYBUY!"
But besides the success of the company, Huang hasn't forgotten what it was like to grow up poor and cherish an eraser bought on a field trip.
His company pays for its employees' children's college tuition (Huang used his own stake in the company to fund that initiative). That includes everyone from managers to pickers in the company's fulfillment centers.
Boxed also takes care of the costs of employees' personal crises when it can, recognizing what I've always said: the customer doesn't come first, the employee does. Put your people first, and they'll go the extra mile for the customer.
Huang is 33. And I'd argue that, when one considers from where he started, to where he is today, his "lifetime" of achievement overwhelms Chelsea's. It's easy to reach the top rung when you start from the one below it. It's entirely another endeavor when you don't even get to start on the ladder.
However, I doubt Huang seeks the kinds of accolades that float Chelsea Clinton's boat. He's not looking for feathers in his cap, but he's certainly earning jewels in his crown by making a real difference in people's lives, from his customers through his innovative ideas, to his employees and their families through his generosity.
Besides, Chelsea winning a Lifetime Achievement Award at age 37 is little different from Barack Obama winning a Nobel Peace Prize ten months after his inauguration.
Wednesday, March 22, 2017
A Votre Santé!
In case you didn't know, that's French for, "To your health!" (Gotta do something with those 12 hours of French I took in high school and college.)
I'm speaking of health care, and taking a bit of a risk in doing so, as the GOP's proposed replacement for Obamacare (the AHCA) may not survive the week. But I'll take a shot anyway, because my final point will remain valid regardless what ultimately becomes of government attempts to get involved in health care. So read on, but you might want to pour yourself a drink, use the bathroom if you need to, and get comfy, as this may be a bit of a long read.
I haven't paid too much attention to news coverage of the plan, because a) the biases are clear, depending on whether your chosen news source leans left or right, and b) there's more noise around this thing than sitting amidst a bunch of teenage girls at a One Direction concert. Besides, when it comes to things like the AHCA or the "Skinny" Budget, I prefer a different source of information:
The document itself.
So I sat down to read the AHCA. But I gave up after a few pages, for a couple of reasons. First, I realize that whatever it looks like now is probably not what it'll look like if/when it passes the House and Senate, and I also understand that it's merely phase one of a planned three-phase effort (more on that later). And second, it didn't take me long to figure out that I know little of the logistical and operational workings of health care.
I just want to know, in the end, how it will affect me. And I suspect that's true of all Americans.
Okay, it's probably only true of half of Americans. The other half just want to jump on Facebook and scream things like "TRUMP IS TAKING AWAY OUR HEALTH CARE!" and "HE'S GOING TO END COVERAGE FOR PRE-EXISTING CONDITIONS!" and "HE'S GOING TO END COVERAGE FOR MY 26-YEAR-OLD WHO LIVES IN THE BASEMENT!" and "TRUMP HATES PUPPIES!"
In a Quixotic attempt to assuage those "progressive" fears, let me say the following: first, Trump has never indicated a desire to take away health care. He just wants to take away a crappy health care plan that got shoved down people's throats and wound up giving everybody less choice for a whole lot more money, and required doctors to increasingly practice defensive medicine, and replace it with something that actually benefits all constituencies involved, in a fair manner.
Second, he wants to retain coverage for both pre-existing conditions (with which I partially agree) and kids up to age 26 on their parents' plans (with which I disagree).
However, I recognize that those assurances will not slake the thirst for partisan fear-mongering of those predisposed to hate anything Trump does. Especially if the thing undoes something Obama did (no matter how poorly). So to those folks, I'd simply say ... keep screaming. Nobody's listening to you anymore anyway.
To those on the far right who are opposed to AHCA because it doesn't go far enough, please understand that it is, again, just the first phase of a three-phase plan. The GOP Congressional leadership has learned from decades of partisan gamesmanship in our nation's cessp- er, capital. They know that they don't have a large enough majority to get all of the pieces passed at once. Thus they're going to have to use a three-phase approach, plus some pretty arcane legislative machinations, to get it done.
So phase one is to get Obamacare repealed, and replace those parts of it that can easily pass a first vote, while retaining some parts of it that may not satisfy the far right, but that's temporary. Admittedly, that also means leaving off the table - for now - things like the ability to buy insurance across state lines. But that's in the plans for one of the subsequent phases. Patience is a virtue.
Let's take a detour to try and calm the fear-mongers on the other side now, futile as that may be.
Yes, the (ever-accurate) CBO has indicated that a whole lot more people would be uninsured under this plan by 2018, and even more some years after that. Several points are in order:
1. Even the CBO acknowledges that most of those additional uninsured through 2018 would be uninsured by choice. In other words, they don't want to pay for insurance, since they think they don't need it. Maybe they're young, with no dependents. Maybe they're really healthy. Maybe they're not thinking clearly. No matter the whys; they don't want insurance, and, given the opportunity to not be penalized for exercising their choice, they will elect not to have it.
2. On that point, consider what Obamacare really did in "providing coverage to all." It forced people to buy something whether they wanted it or not, and taxed them if they exercised free choice by not buying it. Then, the Obama administration crowed about how many more people were insured after Obamacare than before. That's a bit like a car salesman holding people at gunpoint, threatening to shoot them dead if they don't buy a car, then bragging about how many cars he sold.
3. And on a related note, recognize that the CBO's estimates cite "additional" uninsured. That acknowledges that Obamacare left some people uninsured. That's right, boys and girls, your revered President Obama left millions of Americans uninsured. Where's the fake outrage over that?
4. As for those additional numbers of uninsured that would crop up in years subsequent to 2018, it's true that many of those would be uninsured for reasons other than choice. However, note that phases two and three are not in place yet, and are intended to remedy that.
I know, I know, you're not convinced. So ... keep screaming. Nobody's listening to you anymore anyway.
Back to phases two and three, for the far right skeptics. True, we don't yet know what those phases will look like, in part because we don't know what the final phase one will look like once the House and Senate finish tweaking it.
But we have hints: things that have been left out of phase one, but are tougher nuts to crack, like the ability to buy insurance across state lines. Once Obamacare is out of the way, Democrat lawmakers will be faced with the choice of getting on board with those phases, or leaving those additional people uninsured, which will then be on them. Again, the GOP lawmakers understand gamesmanship, and they're playing a long game here, one whose final whistle will come after the mid-terms.
You also need to realize that the GOP doesn't want to pull a Pelosi and draft some bloated, verbose Frankenstein's monster of a bill, then urge their colleagues to "pass this so we can see what's in it."
Now, I'm going to skewer some sacred cows, and see how many people I can make angry.
First, I am all for taking care of the elderly. I count among their number some beloved family members and friends. Heck, I'm pushing 60 myself. So I'm all for things like Medicare, which we pay into with our own hard-earned money and have the right to access after we stop working. (Congress just needs to keep their cotton-pickin' hands off those funds, instead of "borrowing" them and never paying them back.)
However, one of the things that opponents of the AHCA are screaming about is that, while Obamacare caps health care costs for the elderly at three times the cost for younger folks, the AHCA would lift that cap to five times.
Well, even three times might be too high for some, and again, where was the fake outrage over that (especially since Obamacare sent premiums soaring for all, so that means they've soared three times as high for the elderly)? Get premiums back under control, and the five-times cap under AHCA will still translate to less dollars than the three-times cap under Obamacare. It's simple math: if premiums double, three times two is six, which is more than five times one.
Also, I don't take issue with the notion that us older folks should pay more for health insurance. The insurance game is about risks and probabilities, and the probability is higher that I'm going to be at risk of getting sick or having health problems than my 26-year-old daughter.
To wit, last year - my 58th - I had a shoulder x-ray, two chest x-rays, a sonogram (no, I'm not pregnant), an abdominal CT scan, and a brain MRI. Plus enough blood draws to qualify me for pincushion status, and I capped the year off with triple-hernia surgery. Sadly, my guess is that, as I get even older, the hits are gonna keep on coming.
It's like a driver who gets in more accidents than the average Joe: he's going to pay higher auto insurance premiums, right? Or should those of us who don't get in accidents pay more to subsidize him, so that his premiums are no higher than ours? (Note to Bernie Sanders voters: don't answer that question.)
Second, regarding coverage for pre-existing conditions, I'm okay with that if one is changing insurance coverage. However, if one has previously been uninsured, then contracts a disease, and decides to obtain coverage after the diagnosis now that they realize they're going to incur high medical expenses and thus need insurance - sorry, but that's on you.
Sounds heartless, I know. But again, let's use an auto insurance analogy. It's like an uninsured motorist who gets in an accident, then tries to buy an auto policy to cover the cost of the damage. No insurer would cover that motorist - you're required to maintain constant coverage to get a new auto policy. So why should health insurance cover the heretofore uninsured who, once ill, want insurance to cover that particular illness?
Third, I believe that, at 26, you ought to be able to get a job that has insurance coverage. (There would be more of those jobs if Obamacare's high costs hadn't forced so many small businesses to drop coverage for their employees.)
I've had health coverage through my employers since I graduated from college. Oh, I can hear the feel-the-Berners now: "But dude, that was like, 100 years ago!"
Okay. My daughter, who is 26, has had health care coverage through her employer since she graduated from college at 22. So has her 27-year-old husband. So have three of my colleagues, who are aged 26 to 28. It can be done.
Granted, there are those against whom the odds are stacked. However, there are also numerous examples of those against whom the odds were stacked, who defied those odds and rose above the situation. And for those in other situations where the odds are more firmly stacked against them, the reasons represent other root problems that need to be addressed, like urban blight and single-parent households and poor inner-city education opportunities and ... you get the idea.
In other words, you don't fix those root problems by just giving the affected people everything they might need for free. In fact, that only serves to perpetuate those problems. And even free health care can't overcome the myriad other adverse effects of those root causal factors. Let's address them concurrently.
So, under my plan, no coverage for 26-year-olds under their parents' plans. Sorry, helicopter parents. You may just have to learn to stop enabling, and cut that cord.
And what would my plan be?
I don't have the foggiest. I'd prefer to leave that to the experts, so let's invite the health care providers to weigh in. I don't do health care; my doctor doesn't do economic analysis. However, I do have a few thoughts (and sorry for all the numbered lists of things in this post; it's how my brain works).
First, we need meaningful tort reform so that doctors aren't forced to practice defensive medicine for fear of being sued to the moon and back. Maybe we should cap awards. Differentiate between truly negligent malpractice and the inevitable issues that arise from practicing the inexact science that is medicine. If there were no such thing as classaction.com blaring ads on TV every day, maybe doctors could get back to the business of being doctors. ("If you or a loved one has died of mesothelioma, call Dewey, Cheatham and Howe," as if I could make that call post-mortem.)
Here's a real-life example. My doc has decades of experience. He's good, he's pragmatic, I trust him, I like him, and we're more like friends than doctor and patient. He talks to me, and listens to me.
Last year, he was going to write me a prescription, but he needed to do some blood work first, to make sure that other levels were in order. Well, the lab results showed that one of my levels was too high, and that could have indicated other issues. So he ordered the brain scan (turns out I have one - who knew?), but ordered a second round of labs first.
That test showed that the levels were back in line, but he had me go ahead with the brain scan anyway, "just to be sure." (In other words, just to be sure I couldn't sue him, which I wouldn't have done anyway.) The scan turned out fine. So we did one more blood test, and the levels were again fine. Only then did he write me the script.
This extreme defensive medicine is necessitated by unfettered litigiousness. But good luck getting tort reform through a Congress whose 535 members count among their number nearly 200 lawyers. That employment group has the largest representation of any among lawmakers, and their lobby is powerful. Still, the percentage of lawyers in Congress has declined steadily since 1965, so there's hope. (Disclaimer: I am not disparaging lawyers in summa. Summa my favorite people are lawyers.)
Second, we need to overhaul the FDA and make it easier to get drugs approved in this country. And we should re-think how long before drug companies can compete. Drug companies cite their R&D expenditures as justification for that lengthy span. But drug companies spend way more on advertising than on R&D, and they spend more on R&D for "lifestyle" drugs like Viagra than they do on drugs that will cure serious diseases - supply and demand.
I've found that the only thing that will cure my annual sinus infections is a good ol' Z-Pack. Spare me the Madame Curie-esque soliloquies about the perils of antibiotic overuse - sinus infections are no fun at all, and the Z-Pack knocks 'em out in a few days. Yet I always seem to get them when I'm traveling, and the urgent care docs would rather lecture me about antibiotic abuse than prescribe what I need. So I wind up taking their homespun remedies for a week or more, then going to my doc when I return home to get a Z-Pack.
One urgent care doc, upon being told that my doc always prescribes a Z-Pack for my sinus woes, replied, "That's bad medicine." Okay, I thought, I'll be sure and tell my doctor, who's had an established practice for longer than you've been alive and has clinics in the inner city and in Africa, that a mall doc thinks he practices "bad medicine."
So what's the point of this story? When my wife and I were in Cabo in January, we stopped into a Farmacia and picked up a couple of Z-Packs to have on hand just in case. No prescription required. And once when we were in London, my wife strolled into a Boots (the U.K. version of CVS) and bought a prescription medication she'd run out of on the trip, again with no script. Why can't we do that in the U.S.?
Now (with apologies to the Eagles), to sharpen my steely knife for the last sacred beast:
Health care is not a right. There, I said it.
I find it ironic that people like Michael Moore, the deranged closet capitalist who has single-handedly doubled America's Big Mac consumption, believes that it is. Maybe he should exercise his right to exercise. And eat salads.
President Obama was a smoker when he argued that health care is a right while stumping for passage of Obamacare.
I don't begrudge the President his right to smoke (he reportedly quit in 2011, but was also reportedly seen with a pack of smokes at a G7 summit in 2015). Nor do I begrudge Michael Moore his right to pop a cheeseburger in each cheek like some bloody great squirrel storing up nuts for the winter. I really don't care - that's up to them. I just find it ironic that people who make unhealthy choices (as do I) advocate that health care is a right (as do I not).
Life is a right. One could argue that health care is vital to life. Well, for one, my Granddad never went to the doctor until he was in his 70s. Then he was diagnosed with leukemia, and a few years later, he died - of chemotherapy. But he lived a long and happy life prior to that, without going to the doctor. (He also had employer-provided health care in retirement, plus Medicare.)
Also, if health care is a part of the right to life, what about food? Housing? A job? Transportation? Sure, the Berners will argue that all those things are rights.
Hint: there are reasons Bernie lost, and they're not limited to Debbie Wasserman-Schultz having thrown the game in Hillary's favor.
The former Soviet Union argued that those things were rights, too. How'd that work out? Look, if you want to live in a state-provided studio apartment in a tenement block that has more bugs than an entymology lab (and I mean the electronic kind), slave for 15 hours a day in a sooty factory for no wages, ride in sketchy buses and cable cars, and stand in borscht lines, you go right ahead. I'll take my free-market chances. (I can only imagine what "free" health care was like back in the USSR, with apologies to the Beatles.)
Liberty is a right. So forcing people to give up their free choice to not have health care coverage is taking away a right, not granting one.
The pursuit of happiness is a right. The prospect of losing my insurance coverage or seeing my premiums double under Obamacare doesn't make me happy. It makes me cranky, and I'm cranky enough as it is.
So what would I propose for when the uninsured get sick? Simple. They can try to obtain treatment. And I'm sure there's a doctor who will feel that to not treat that person is a violation of the Hippocratic Oath.
I don't necessarily disagree. But don't treat that person and then stick the rest of us with the bill. They were exercising their free choice to not be insured, and they bear the consequences of their choices. If you choose to treat them, that's out of your pocket. As I've said before, your right to punch me in the face ends at my nose. In other words, your rights end when exercising them infringes on the rights of others. That includes paying your bills.
I realize that there are nuances that need to be addressed for the hopelessly indigent, but again, let's tackle the root causes, and help them to not be indigent any more, rather than making them even more dependent. It's tragic when some poor person loses everything they have in an apartment fire, but you don't hear the left crying out for renters' insurance for all, do you?
Oops - sorry I brought that up.
I'm speaking of health care, and taking a bit of a risk in doing so, as the GOP's proposed replacement for Obamacare (the AHCA) may not survive the week. But I'll take a shot anyway, because my final point will remain valid regardless what ultimately becomes of government attempts to get involved in health care. So read on, but you might want to pour yourself a drink, use the bathroom if you need to, and get comfy, as this may be a bit of a long read.
I haven't paid too much attention to news coverage of the plan, because a) the biases are clear, depending on whether your chosen news source leans left or right, and b) there's more noise around this thing than sitting amidst a bunch of teenage girls at a One Direction concert. Besides, when it comes to things like the AHCA or the "Skinny" Budget, I prefer a different source of information:
The document itself.
So I sat down to read the AHCA. But I gave up after a few pages, for a couple of reasons. First, I realize that whatever it looks like now is probably not what it'll look like if/when it passes the House and Senate, and I also understand that it's merely phase one of a planned three-phase effort (more on that later). And second, it didn't take me long to figure out that I know little of the logistical and operational workings of health care.
I just want to know, in the end, how it will affect me. And I suspect that's true of all Americans.
Okay, it's probably only true of half of Americans. The other half just want to jump on Facebook and scream things like "TRUMP IS TAKING AWAY OUR HEALTH CARE!" and "HE'S GOING TO END COVERAGE FOR PRE-EXISTING CONDITIONS!" and "HE'S GOING TO END COVERAGE FOR MY 26-YEAR-OLD WHO LIVES IN THE BASEMENT!" and "TRUMP HATES PUPPIES!"
In a Quixotic attempt to assuage those "progressive" fears, let me say the following: first, Trump has never indicated a desire to take away health care. He just wants to take away a crappy health care plan that got shoved down people's throats and wound up giving everybody less choice for a whole lot more money, and required doctors to increasingly practice defensive medicine, and replace it with something that actually benefits all constituencies involved, in a fair manner.
Second, he wants to retain coverage for both pre-existing conditions (with which I partially agree) and kids up to age 26 on their parents' plans (with which I disagree).
However, I recognize that those assurances will not slake the thirst for partisan fear-mongering of those predisposed to hate anything Trump does. Especially if the thing undoes something Obama did (no matter how poorly). So to those folks, I'd simply say ... keep screaming. Nobody's listening to you anymore anyway.
To those on the far right who are opposed to AHCA because it doesn't go far enough, please understand that it is, again, just the first phase of a three-phase plan. The GOP Congressional leadership has learned from decades of partisan gamesmanship in our nation's cessp- er, capital. They know that they don't have a large enough majority to get all of the pieces passed at once. Thus they're going to have to use a three-phase approach, plus some pretty arcane legislative machinations, to get it done.
So phase one is to get Obamacare repealed, and replace those parts of it that can easily pass a first vote, while retaining some parts of it that may not satisfy the far right, but that's temporary. Admittedly, that also means leaving off the table - for now - things like the ability to buy insurance across state lines. But that's in the plans for one of the subsequent phases. Patience is a virtue.
Let's take a detour to try and calm the fear-mongers on the other side now, futile as that may be.
Yes, the (ever-accurate) CBO has indicated that a whole lot more people would be uninsured under this plan by 2018, and even more some years after that. Several points are in order:
1. Even the CBO acknowledges that most of those additional uninsured through 2018 would be uninsured by choice. In other words, they don't want to pay for insurance, since they think they don't need it. Maybe they're young, with no dependents. Maybe they're really healthy. Maybe they're not thinking clearly. No matter the whys; they don't want insurance, and, given the opportunity to not be penalized for exercising their choice, they will elect not to have it.
2. On that point, consider what Obamacare really did in "providing coverage to all." It forced people to buy something whether they wanted it or not, and taxed them if they exercised free choice by not buying it. Then, the Obama administration crowed about how many more people were insured after Obamacare than before. That's a bit like a car salesman holding people at gunpoint, threatening to shoot them dead if they don't buy a car, then bragging about how many cars he sold.
3. And on a related note, recognize that the CBO's estimates cite "additional" uninsured. That acknowledges that Obamacare left some people uninsured. That's right, boys and girls, your revered President Obama left millions of Americans uninsured. Where's the fake outrage over that?
4. As for those additional numbers of uninsured that would crop up in years subsequent to 2018, it's true that many of those would be uninsured for reasons other than choice. However, note that phases two and three are not in place yet, and are intended to remedy that.
I know, I know, you're not convinced. So ... keep screaming. Nobody's listening to you anymore anyway.
Back to phases two and three, for the far right skeptics. True, we don't yet know what those phases will look like, in part because we don't know what the final phase one will look like once the House and Senate finish tweaking it.
But we have hints: things that have been left out of phase one, but are tougher nuts to crack, like the ability to buy insurance across state lines. Once Obamacare is out of the way, Democrat lawmakers will be faced with the choice of getting on board with those phases, or leaving those additional people uninsured, which will then be on them. Again, the GOP lawmakers understand gamesmanship, and they're playing a long game here, one whose final whistle will come after the mid-terms.
You also need to realize that the GOP doesn't want to pull a Pelosi and draft some bloated, verbose Frankenstein's monster of a bill, then urge their colleagues to "pass this so we can see what's in it."
Now, I'm going to skewer some sacred cows, and see how many people I can make angry.
First, I am all for taking care of the elderly. I count among their number some beloved family members and friends. Heck, I'm pushing 60 myself. So I'm all for things like Medicare, which we pay into with our own hard-earned money and have the right to access after we stop working. (Congress just needs to keep their cotton-pickin' hands off those funds, instead of "borrowing" them and never paying them back.)
However, one of the things that opponents of the AHCA are screaming about is that, while Obamacare caps health care costs for the elderly at three times the cost for younger folks, the AHCA would lift that cap to five times.
Well, even three times might be too high for some, and again, where was the fake outrage over that (especially since Obamacare sent premiums soaring for all, so that means they've soared three times as high for the elderly)? Get premiums back under control, and the five-times cap under AHCA will still translate to less dollars than the three-times cap under Obamacare. It's simple math: if premiums double, three times two is six, which is more than five times one.
Also, I don't take issue with the notion that us older folks should pay more for health insurance. The insurance game is about risks and probabilities, and the probability is higher that I'm going to be at risk of getting sick or having health problems than my 26-year-old daughter.
To wit, last year - my 58th - I had a shoulder x-ray, two chest x-rays, a sonogram (no, I'm not pregnant), an abdominal CT scan, and a brain MRI. Plus enough blood draws to qualify me for pincushion status, and I capped the year off with triple-hernia surgery. Sadly, my guess is that, as I get even older, the hits are gonna keep on coming.
It's like a driver who gets in more accidents than the average Joe: he's going to pay higher auto insurance premiums, right? Or should those of us who don't get in accidents pay more to subsidize him, so that his premiums are no higher than ours? (Note to Bernie Sanders voters: don't answer that question.)
Second, regarding coverage for pre-existing conditions, I'm okay with that if one is changing insurance coverage. However, if one has previously been uninsured, then contracts a disease, and decides to obtain coverage after the diagnosis now that they realize they're going to incur high medical expenses and thus need insurance - sorry, but that's on you.
Sounds heartless, I know. But again, let's use an auto insurance analogy. It's like an uninsured motorist who gets in an accident, then tries to buy an auto policy to cover the cost of the damage. No insurer would cover that motorist - you're required to maintain constant coverage to get a new auto policy. So why should health insurance cover the heretofore uninsured who, once ill, want insurance to cover that particular illness?
Third, I believe that, at 26, you ought to be able to get a job that has insurance coverage. (There would be more of those jobs if Obamacare's high costs hadn't forced so many small businesses to drop coverage for their employees.)
I've had health coverage through my employers since I graduated from college. Oh, I can hear the feel-the-Berners now: "But dude, that was like, 100 years ago!"
Okay. My daughter, who is 26, has had health care coverage through her employer since she graduated from college at 22. So has her 27-year-old husband. So have three of my colleagues, who are aged 26 to 28. It can be done.
Granted, there are those against whom the odds are stacked. However, there are also numerous examples of those against whom the odds were stacked, who defied those odds and rose above the situation. And for those in other situations where the odds are more firmly stacked against them, the reasons represent other root problems that need to be addressed, like urban blight and single-parent households and poor inner-city education opportunities and ... you get the idea.
In other words, you don't fix those root problems by just giving the affected people everything they might need for free. In fact, that only serves to perpetuate those problems. And even free health care can't overcome the myriad other adverse effects of those root causal factors. Let's address them concurrently.
So, under my plan, no coverage for 26-year-olds under their parents' plans. Sorry, helicopter parents. You may just have to learn to stop enabling, and cut that cord.
And what would my plan be?
I don't have the foggiest. I'd prefer to leave that to the experts, so let's invite the health care providers to weigh in. I don't do health care; my doctor doesn't do economic analysis. However, I do have a few thoughts (and sorry for all the numbered lists of things in this post; it's how my brain works).
First, we need meaningful tort reform so that doctors aren't forced to practice defensive medicine for fear of being sued to the moon and back. Maybe we should cap awards. Differentiate between truly negligent malpractice and the inevitable issues that arise from practicing the inexact science that is medicine. If there were no such thing as classaction.com blaring ads on TV every day, maybe doctors could get back to the business of being doctors. ("If you or a loved one has died of mesothelioma, call Dewey, Cheatham and Howe," as if I could make that call post-mortem.)
Here's a real-life example. My doc has decades of experience. He's good, he's pragmatic, I trust him, I like him, and we're more like friends than doctor and patient. He talks to me, and listens to me.
Last year, he was going to write me a prescription, but he needed to do some blood work first, to make sure that other levels were in order. Well, the lab results showed that one of my levels was too high, and that could have indicated other issues. So he ordered the brain scan (turns out I have one - who knew?), but ordered a second round of labs first.
That test showed that the levels were back in line, but he had me go ahead with the brain scan anyway, "just to be sure." (In other words, just to be sure I couldn't sue him, which I wouldn't have done anyway.) The scan turned out fine. So we did one more blood test, and the levels were again fine. Only then did he write me the script.
This extreme defensive medicine is necessitated by unfettered litigiousness. But good luck getting tort reform through a Congress whose 535 members count among their number nearly 200 lawyers. That employment group has the largest representation of any among lawmakers, and their lobby is powerful. Still, the percentage of lawyers in Congress has declined steadily since 1965, so there's hope. (Disclaimer: I am not disparaging lawyers in summa. Summa my favorite people are lawyers.)
Second, we need to overhaul the FDA and make it easier to get drugs approved in this country. And we should re-think how long before drug companies can compete. Drug companies cite their R&D expenditures as justification for that lengthy span. But drug companies spend way more on advertising than on R&D, and they spend more on R&D for "lifestyle" drugs like Viagra than they do on drugs that will cure serious diseases - supply and demand.
I've found that the only thing that will cure my annual sinus infections is a good ol' Z-Pack. Spare me the Madame Curie-esque soliloquies about the perils of antibiotic overuse - sinus infections are no fun at all, and the Z-Pack knocks 'em out in a few days. Yet I always seem to get them when I'm traveling, and the urgent care docs would rather lecture me about antibiotic abuse than prescribe what I need. So I wind up taking their homespun remedies for a week or more, then going to my doc when I return home to get a Z-Pack.
One urgent care doc, upon being told that my doc always prescribes a Z-Pack for my sinus woes, replied, "That's bad medicine." Okay, I thought, I'll be sure and tell my doctor, who's had an established practice for longer than you've been alive and has clinics in the inner city and in Africa, that a mall doc thinks he practices "bad medicine."
So what's the point of this story? When my wife and I were in Cabo in January, we stopped into a Farmacia and picked up a couple of Z-Packs to have on hand just in case. No prescription required. And once when we were in London, my wife strolled into a Boots (the U.K. version of CVS) and bought a prescription medication she'd run out of on the trip, again with no script. Why can't we do that in the U.S.?
Now (with apologies to the Eagles), to sharpen my steely knife for the last sacred beast:
Health care is not a right. There, I said it.
I find it ironic that people like Michael Moore, the deranged closet capitalist who has single-handedly doubled America's Big Mac consumption, believes that it is. Maybe he should exercise his right to exercise. And eat salads.
President Obama was a smoker when he argued that health care is a right while stumping for passage of Obamacare.
I don't begrudge the President his right to smoke (he reportedly quit in 2011, but was also reportedly seen with a pack of smokes at a G7 summit in 2015). Nor do I begrudge Michael Moore his right to pop a cheeseburger in each cheek like some bloody great squirrel storing up nuts for the winter. I really don't care - that's up to them. I just find it ironic that people who make unhealthy choices (as do I) advocate that health care is a right (as do I not).
Life is a right. One could argue that health care is vital to life. Well, for one, my Granddad never went to the doctor until he was in his 70s. Then he was diagnosed with leukemia, and a few years later, he died - of chemotherapy. But he lived a long and happy life prior to that, without going to the doctor. (He also had employer-provided health care in retirement, plus Medicare.)
Also, if health care is a part of the right to life, what about food? Housing? A job? Transportation? Sure, the Berners will argue that all those things are rights.
Hint: there are reasons Bernie lost, and they're not limited to Debbie Wasserman-Schultz having thrown the game in Hillary's favor.
The former Soviet Union argued that those things were rights, too. How'd that work out? Look, if you want to live in a state-provided studio apartment in a tenement block that has more bugs than an entymology lab (and I mean the electronic kind), slave for 15 hours a day in a sooty factory for no wages, ride in sketchy buses and cable cars, and stand in borscht lines, you go right ahead. I'll take my free-market chances. (I can only imagine what "free" health care was like back in the USSR, with apologies to the Beatles.)
Liberty is a right. So forcing people to give up their free choice to not have health care coverage is taking away a right, not granting one.
The pursuit of happiness is a right. The prospect of losing my insurance coverage or seeing my premiums double under Obamacare doesn't make me happy. It makes me cranky, and I'm cranky enough as it is.
So what would I propose for when the uninsured get sick? Simple. They can try to obtain treatment. And I'm sure there's a doctor who will feel that to not treat that person is a violation of the Hippocratic Oath.
I don't necessarily disagree. But don't treat that person and then stick the rest of us with the bill. They were exercising their free choice to not be insured, and they bear the consequences of their choices. If you choose to treat them, that's out of your pocket. As I've said before, your right to punch me in the face ends at my nose. In other words, your rights end when exercising them infringes on the rights of others. That includes paying your bills.
I realize that there are nuances that need to be addressed for the hopelessly indigent, but again, let's tackle the root causes, and help them to not be indigent any more, rather than making them even more dependent. It's tragic when some poor person loses everything they have in an apartment fire, but you don't hear the left crying out for renters' insurance for all, do you?
Oops - sorry I brought that up.
Thursday, March 16, 2017
Daylight Savings Time, and "You're Fired!"
First, a note on Daylight Savings Time (DST):
It's stupid. It serves no purpose. It messes up the sleep schedules of toddlers, which make them cranky and difficult to deal with.
It messes up my sleep schedule, which makes me cranky and difficult to deal with.
To think that legislators actually spent time debating and then passing a bill to tell the states what time it is galls me. Ah well, at least they weren't passing bills screwing up important things like health care and taxes and banking reform.
Another problem with DST is that it falls on different dates every year, so it's nigh impossible to keep track of. Then there's having to re-set every damn clock in the house. What a nuisance.
Oh, and the car. Who can remember every six months how to re-set the clock in their car? To heck with fuel emissions standards, our first priority should be to build cars whose clocks automatically adjust to DST. My computer does it. My TVs and cable boxes do it. My phone and my Apple Watch do it. Heck, my alarm clock does it. It we can build driverless cars, we can surely tackle this more important problem.
Arizona doesn't follow it. Hawaii doesn't follow it. Nor do many U.S. territories, including Puerto Rico and the U.S. Virgin Islands. How come the places that have awesome climates don't observe DST? Maybe they're onto something. Maybe I should move to Hawaii or St. John.
All I know is that if I were elected President, my first executive order would be to abolish DST. Who's with me?
*************************************
Last week, the Trump administration channeled its inner "The Apprentice," when Attorney General Jeff Sessions requested the resignations of 46 justices appointed by President Obama.
Not surprisingly, the left was apoplectic. How dare they?
Never mind the fact that President Obama also asked for the resignations of Bush appointees. Never mind that President Clinton asked for the resignations of 93 justices appointed by Bush Sr. Never mind that Presidents have done this dating back to Thomas Jefferson.
One of the left's rallying cries was that, with these attorneys suddenly ousted from office, there'd be no one to fill the void and carry out ongoing investigations.
This is patently absurd. Investigations overlap, so there would never come a point in time when all investigations were completed. Moreover, any U.S. attorney that didn't keep his underlings in the loop to provide continuity in the event he or she got hit by a bus, or won the lottery, or was asked to resign by a new administration, deserves to be fired for incompetence.
The investigations will continue. The assistant attorneys will step in. Life as we know it will continue, and the sky will not fall.
One U.S. attorney held out. Preet Bharara, U.S. Attorney for Southern New York, had apparently had a conversation with the President-Elect during which he was asked to stay. Preet (it's too hard to type Bharara) supposedly went after the left and the right alike. He was investigating the mayor of NYC and the governor of NY (both of whom warrant investigating). He went after Wall Street. He was considered a non-partisan judge.
So he became the left's poster child for apoplexy.
Look, after Trump was elected, the leaks by officials from the Obama administration came hard and fast. I posted that the President needed to plug the leaks. He did (no, I don't think he listened to me, I think he figured that out on his own).
So maybe Sessions changed his mind. Maybe the administration decided all Obama holdovers needed to go because of the leaks. Maybe they were just following the examples of Presidents past, including Presidents Obama and Clinton.
In any event, Preet was allegedly fired. And after he was fired, he did everything in his power to justify the action.
He publicly tweeted his firing. He held a media event on the steps of the courthouse in New York, shaking hands with his staff in front of the cameras, instead of in the office where such farewells normally take place. He tried to make himself the center of attention.
Why? Most observers believe he was launching his bid for governor of NY.
Well, good for him. Maybe some future U.S. attorney will follow in his footsteps and investigate the governor.
*********************************
A final note on the Trump tax return non-event:
So he made a bunch of money. Big surprise. And he paid a lot in taxes.
Bigger surprise, at least to the left.
Personally, I could care less whether Presidential candidates released their tax returns. Why?
Because the average American couldn't decipher them if they tried, and the media would try to twist the information to mislead those average Americans.
As was proved by MSNBC's Rachel Maddow. On both counts.
It's stupid. It serves no purpose. It messes up the sleep schedules of toddlers, which make them cranky and difficult to deal with.
It messes up my sleep schedule, which makes me cranky and difficult to deal with.
To think that legislators actually spent time debating and then passing a bill to tell the states what time it is galls me. Ah well, at least they weren't passing bills screwing up important things like health care and taxes and banking reform.
Another problem with DST is that it falls on different dates every year, so it's nigh impossible to keep track of. Then there's having to re-set every damn clock in the house. What a nuisance.
Oh, and the car. Who can remember every six months how to re-set the clock in their car? To heck with fuel emissions standards, our first priority should be to build cars whose clocks automatically adjust to DST. My computer does it. My TVs and cable boxes do it. My phone and my Apple Watch do it. Heck, my alarm clock does it. It we can build driverless cars, we can surely tackle this more important problem.
Arizona doesn't follow it. Hawaii doesn't follow it. Nor do many U.S. territories, including Puerto Rico and the U.S. Virgin Islands. How come the places that have awesome climates don't observe DST? Maybe they're onto something. Maybe I should move to Hawaii or St. John.
All I know is that if I were elected President, my first executive order would be to abolish DST. Who's with me?
*************************************
Last week, the Trump administration channeled its inner "The Apprentice," when Attorney General Jeff Sessions requested the resignations of 46 justices appointed by President Obama.
Not surprisingly, the left was apoplectic. How dare they?
Never mind the fact that President Obama also asked for the resignations of Bush appointees. Never mind that President Clinton asked for the resignations of 93 justices appointed by Bush Sr. Never mind that Presidents have done this dating back to Thomas Jefferson.
One of the left's rallying cries was that, with these attorneys suddenly ousted from office, there'd be no one to fill the void and carry out ongoing investigations.
This is patently absurd. Investigations overlap, so there would never come a point in time when all investigations were completed. Moreover, any U.S. attorney that didn't keep his underlings in the loop to provide continuity in the event he or she got hit by a bus, or won the lottery, or was asked to resign by a new administration, deserves to be fired for incompetence.
The investigations will continue. The assistant attorneys will step in. Life as we know it will continue, and the sky will not fall.
One U.S. attorney held out. Preet Bharara, U.S. Attorney for Southern New York, had apparently had a conversation with the President-Elect during which he was asked to stay. Preet (it's too hard to type Bharara) supposedly went after the left and the right alike. He was investigating the mayor of NYC and the governor of NY (both of whom warrant investigating). He went after Wall Street. He was considered a non-partisan judge.
So he became the left's poster child for apoplexy.
Look, after Trump was elected, the leaks by officials from the Obama administration came hard and fast. I posted that the President needed to plug the leaks. He did (no, I don't think he listened to me, I think he figured that out on his own).
So maybe Sessions changed his mind. Maybe the administration decided all Obama holdovers needed to go because of the leaks. Maybe they were just following the examples of Presidents past, including Presidents Obama and Clinton.
In any event, Preet was allegedly fired. And after he was fired, he did everything in his power to justify the action.
He publicly tweeted his firing. He held a media event on the steps of the courthouse in New York, shaking hands with his staff in front of the cameras, instead of in the office where such farewells normally take place. He tried to make himself the center of attention.
Why? Most observers believe he was launching his bid for governor of NY.
Well, good for him. Maybe some future U.S. attorney will follow in his footsteps and investigate the governor.
*********************************
A final note on the Trump tax return non-event:
So he made a bunch of money. Big surprise. And he paid a lot in taxes.
Bigger surprise, at least to the left.
Personally, I could care less whether Presidential candidates released their tax returns. Why?
Because the average American couldn't decipher them if they tried, and the media would try to twist the information to mislead those average Americans.
As was proved by MSNBC's Rachel Maddow. On both counts.
Monday, March 13, 2017
Abstinence Makes the Heart Grow Fonder
I'm not talking about giving up drinking. (In the current political climate, that's probably more difficult than ever.) Nor is this a Lent post, advocating giving up something between Ash Wednesday and Easter.
No, I'm talking about the recent "A Day Without Immigrants" and "A Day Without Women" protests. (Ah, more protests - er, tantrums.)
Okay, I get it. Our economy would be adversely impacted without the contributions of immigrants. Believe me, no one is more aware of that than I. I travel for a living, spending about 110 days on the road in a given year. In my travels, I encounter many immigrants. The people who cook my meals are often immigrants. The people who clean my hotel rooms are as well (I tip them - do you, or do you just protest on their behalf, then stiff them for the work they do for you?).
I have noted that where the immigrants come from varies widely. The commonly held misconception is that every hotel maid is Hispanic. It might surprise you to know that in the Washington, D.C. area, in Houston, or in Seattle, most of the maids are from Russia, the Baltics or Eastern Europe. (And no, I don't suspect the Russian maids are spies, something that might surprise many liberal members of Congress.) In Birmingham, they're mostly African-Americans whose families have been here for generations.
I also assume that most of the immigrants who do these jobs are here legally. A public corporation such as Hilton (disclaimer: I'm not only a Diamond HHonors member, but a shareholder) is unlikely to risk hiring illegals as maids. Yes, the guy who framed your house or does your landscaping may well be here illegally, but that's not the majority of the immigrant workforce.
Still, I do not contest that our economy would be adversely impacted by an absence of immigrants. I probably wouldn't have a working iPhone without immigrants from Asia and India. I might not be able to satisfy my craving for good Mexican food without immigrants. My hotel rooms might go uncleaned. I might not be able to use Microsoft Windows. (Okay, so that would be a blessing.)
Nor do I dispute that our economy - and our lives in general - would be adversely impacted were there no women in our country. I value the women in my life - my wife, my daughter, my Mother, my sister. They all play a vital role in my life, and they all contribute to the economic success of America. And they enhance my quality of life in ways that transcend factors economic.
However, what if we commemorated A Day Without White Men? I could argue that the financial markets would largely grind to a halt, as, right or wrong, the markets are dominated by white males. I could argue that our financial institutions - banks, credit unions, and the like - would also be crippled. I make my living consulting with financial institutions, and while I encounter increasing numbers of female CEOs in my work, the C-suites and boardrooms are still largely dominated by white males.
Not that that is, in and of itself, a good thing. I'd like to think that we'd fill our C-suites and boardrooms with the most qualified individuals, and not be beholden to outdated traditions - but also not be bound by quotas. I prefer a workplace, and an America, that is a meritocracy. If the most qualified individuals are women, immigrants or any other group, by all means they should rule the roost, even if white males are relegated to flipping burgers and cleaning hotel rooms.
But if we were to propose A Day Without White Men, we'd be labeled bigots, racists, sexists.
When I was in college, I took a course in Sociology (probably the biggest waste of time in my life before Facebook reared its ugly, time-sucking head). My instructor walked into the classroom one day and proudly announced that she had been selected to head up the university's new Women's Studies degree program.
Ever the rebel, I raised my hand. She made the mistake of calling on me.
I asked her, "When will we have a Men's Studies program?"
She replied that all of the university's degree programs were essentially Men's Studies programs. So I asked why we didn't have a program by that name? Before she could reply, I noted that if I were a history major, I'd study the suffrage movement and learn about Rosa Parks. If I were a psychology major (which I was at the time), we'd study Mary Ainsworth and Karen Horney. If I were pre-med, we'd study Madame Curie.
Needless to say, I dropped that class lest she fail me. (Since it was a required course, I re-took it later from a male professor who was actually a worse educator than she was, but he wasn't as militant, so I figured I could pass on the merits.)
The bottom line is this: our society, and our economy, needs all ethnic, socioeconomic and gender groups working together. Without any of us, the gears would not turn as smoothly. Every rational person recognizes this. Even Donald Trump, as misogynistic as some of his statements may be, recognizes the value of women in his own organization, as evidenced by his executive hires. He recognizes the value of women in his administration, as evidenced by his cabinet picks, among them Betsy DeVos and Elaine Chao (say what you will about them; they are still women).
I'd just like to see us stop over-emphasizing the importance of this group or that in our economy and our society, and recognize that we are ALL of value, we are ALL of importance.
A friend of mine, Greg Thomas, recently authored an excellent book titled "Race in America: A Call to Heal." It is a measured, even-handed, non-finger-pointing treatment of a very divisive subject. In it, he notes that racism is not a white or black problem, it is a sin problem: it begins when we view another person as being of less value than ourselves, whether it be on the basis of the color of their skin, their gender, where they hail from, or their religious beliefs.
So yes, Hispanics matter. Blacks matter. Women matter. Muslims and Hindus matter. And, believe it or not, white Christian males matter. We're all in this together, and we all need each other. So instead of setting aside opportunities to celebrate what makes us different, what pits us against each other, how about if we celebrate the fact that, in the eyes of the One who matters, we are all the same? That in terms of our impact on the economy and on society, we are all equal?
In other words, how about celebrating A Day Without Unity? For that is the greatest threat we face, and the one thing that prevents us from meeting our true potential, and achieving our highest calling.
No, I'm talking about the recent "A Day Without Immigrants" and "A Day Without Women" protests. (Ah, more protests - er, tantrums.)
Okay, I get it. Our economy would be adversely impacted without the contributions of immigrants. Believe me, no one is more aware of that than I. I travel for a living, spending about 110 days on the road in a given year. In my travels, I encounter many immigrants. The people who cook my meals are often immigrants. The people who clean my hotel rooms are as well (I tip them - do you, or do you just protest on their behalf, then stiff them for the work they do for you?).
I have noted that where the immigrants come from varies widely. The commonly held misconception is that every hotel maid is Hispanic. It might surprise you to know that in the Washington, D.C. area, in Houston, or in Seattle, most of the maids are from Russia, the Baltics or Eastern Europe. (And no, I don't suspect the Russian maids are spies, something that might surprise many liberal members of Congress.) In Birmingham, they're mostly African-Americans whose families have been here for generations.
I also assume that most of the immigrants who do these jobs are here legally. A public corporation such as Hilton (disclaimer: I'm not only a Diamond HHonors member, but a shareholder) is unlikely to risk hiring illegals as maids. Yes, the guy who framed your house or does your landscaping may well be here illegally, but that's not the majority of the immigrant workforce.
Still, I do not contest that our economy would be adversely impacted by an absence of immigrants. I probably wouldn't have a working iPhone without immigrants from Asia and India. I might not be able to satisfy my craving for good Mexican food without immigrants. My hotel rooms might go uncleaned. I might not be able to use Microsoft Windows. (Okay, so that would be a blessing.)
Nor do I dispute that our economy - and our lives in general - would be adversely impacted were there no women in our country. I value the women in my life - my wife, my daughter, my Mother, my sister. They all play a vital role in my life, and they all contribute to the economic success of America. And they enhance my quality of life in ways that transcend factors economic.
However, what if we commemorated A Day Without White Men? I could argue that the financial markets would largely grind to a halt, as, right or wrong, the markets are dominated by white males. I could argue that our financial institutions - banks, credit unions, and the like - would also be crippled. I make my living consulting with financial institutions, and while I encounter increasing numbers of female CEOs in my work, the C-suites and boardrooms are still largely dominated by white males.
Not that that is, in and of itself, a good thing. I'd like to think that we'd fill our C-suites and boardrooms with the most qualified individuals, and not be beholden to outdated traditions - but also not be bound by quotas. I prefer a workplace, and an America, that is a meritocracy. If the most qualified individuals are women, immigrants or any other group, by all means they should rule the roost, even if white males are relegated to flipping burgers and cleaning hotel rooms.
But if we were to propose A Day Without White Men, we'd be labeled bigots, racists, sexists.
When I was in college, I took a course in Sociology (probably the biggest waste of time in my life before Facebook reared its ugly, time-sucking head). My instructor walked into the classroom one day and proudly announced that she had been selected to head up the university's new Women's Studies degree program.
Ever the rebel, I raised my hand. She made the mistake of calling on me.
I asked her, "When will we have a Men's Studies program?"
She replied that all of the university's degree programs were essentially Men's Studies programs. So I asked why we didn't have a program by that name? Before she could reply, I noted that if I were a history major, I'd study the suffrage movement and learn about Rosa Parks. If I were a psychology major (which I was at the time), we'd study Mary Ainsworth and Karen Horney. If I were pre-med, we'd study Madame Curie.
Needless to say, I dropped that class lest she fail me. (Since it was a required course, I re-took it later from a male professor who was actually a worse educator than she was, but he wasn't as militant, so I figured I could pass on the merits.)
The bottom line is this: our society, and our economy, needs all ethnic, socioeconomic and gender groups working together. Without any of us, the gears would not turn as smoothly. Every rational person recognizes this. Even Donald Trump, as misogynistic as some of his statements may be, recognizes the value of women in his own organization, as evidenced by his executive hires. He recognizes the value of women in his administration, as evidenced by his cabinet picks, among them Betsy DeVos and Elaine Chao (say what you will about them; they are still women).
I'd just like to see us stop over-emphasizing the importance of this group or that in our economy and our society, and recognize that we are ALL of value, we are ALL of importance.
A friend of mine, Greg Thomas, recently authored an excellent book titled "Race in America: A Call to Heal." It is a measured, even-handed, non-finger-pointing treatment of a very divisive subject. In it, he notes that racism is not a white or black problem, it is a sin problem: it begins when we view another person as being of less value than ourselves, whether it be on the basis of the color of their skin, their gender, where they hail from, or their religious beliefs.
So yes, Hispanics matter. Blacks matter. Women matter. Muslims and Hindus matter. And, believe it or not, white Christian males matter. We're all in this together, and we all need each other. So instead of setting aside opportunities to celebrate what makes us different, what pits us against each other, how about if we celebrate the fact that, in the eyes of the One who matters, we are all the same? That in terms of our impact on the economy and on society, we are all equal?
In other words, how about celebrating A Day Without Unity? For that is the greatest threat we face, and the one thing that prevents us from meeting our true potential, and achieving our highest calling.
Subscribe to:
Posts (Atom)